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Terror on U.S. soil brought tumult to world markets overnight as investors try to make sense of tragedies in New York and Washington.

As trading opened in London, the

FTSE 100 Index

dropped by 62 points to 4684 at the open, a new 35-month low. However, as the session continued, traders in Britain became less skittish, and the FTSE was trading up 1.1% to 4787 in late-morning trading.

Continental markets seemed to follow suit. In Frankfurt, the


slumped more than 50 points at the open and lost 1.5% early, but it quickly regained its footing, recently trading down just 0.25% at 4264.

In Paris, the

CAC 40

lost nearly 3% as the market opened at 3943. That is on top of a 7.4% decline Tuesday, a 30-month low. In late-morning trading, the Paris market recovered and recently traded at 4055, largely unchanged from Tuesday's close.

Most European exchanges suspended trading in most U.S. equities Wednesday. And, European exchanges announced they will suspend trading for one minute at 8:45 a.m. EDT Wednesday to recognize a moment of silence for U.S. casualties from the terror that began about that time Tuesday morning.

Asian Markets Slump

Markets in Asia and the Pacific Rim opened sharply lower, but unlike Europe, never regained their footing as several rally attempts failed.



closed with a loss of 6.6% at 9610, the lowest level since 1983 and the first time in 17 years that the Japanese benchmark has dropped below the 10,000 level. Major exporters like


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posted daily limit losses.

In Hong Kong, the

Heng Seng Index

also slipped below the 10,000 level, trading down 8.9% to 9494. Again, major exporters and firms with U.S. exposure led the decline, with

Cathay Pacific Airways

losing nearly 17%, bank and investment firm

HSBC Holdings

dropping 7.8% and

Johnson Electric Holdings

, a manufacturer of small electric motors and with major U.S export accounts, slumping 14.4%.

Other Asian markets followed suit. In Singapore, the

Straits Time Index

closed down 7.4%. The

All Ordinaries Index

in Australia was down 4.1%, and the Korean

Kospi Index

dropped 12% to 476. Exchanges in Taiwan and Malaysia remained closed Wednesday.

Traders across Asia and Europe came to work Wednesday aware that the chilling tragedy in the U.S. would jolt the world and, hence, the markets.

"The world has changed after this," Louie Bate, managing director of ING Barings Securities (Philippines), told


. "Spending, travel and trade will change. People in the United States might not spend as much, and we were counting on that for a recovery."

Dollar Improves. Oil, Gold Give Back Gains

With U.S. central bankers asking foreign exchanges to limit trading of the dollar, thin trading helped the U.S. currency to recover from Tuesday's losses against European currencies.

Crude oil moderated after a sharp spike in the aftermath of Tuesday's terror. October Brent Crude, which traded as high as $31 per barrel Tuesday before settling back, last traded in London at $28.60 a barrel, off 46 cents.

Concerns over supply disruptions lessened as OPEC pledged to continue oil production and delivery Tuesday. And, in the wake of Tuesday's carnage, analysts are now focused on the potential for demand declines in the U.S.

There appears to be no threat of oil shortages, and the American Petroleum Institute said Tuesday that gasoline supplies were adequate to meet U.S. demand. Nevertheless, some gasoline stations are capitalizing on the moment with some Midwestern gas stations posting prices of $4 a gallon by late Tuesday.

Gold also gave back some of Tuesday's gains. Historically considered a safe haven in times of international turmoil, gold pushed as high as $290 an ounce Tuesday. In midday London trading Wednesday, gold traded at $285.

Christopher S. Edmonds is president of Resource Dynamics, a private financial consulting firm based in Atlanta. At time of publication, neither Edmonds nor his firm held positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Edmonds cannot provide investment advice or recommendations, he welcomes your feedback and invites you to send it to

Chris Edmonds.